Correlation Between NYSE Composite and Signet Jewelers
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Signet Jewelers at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NYSE Composite and Signet Jewelers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Signet Jewelers, you can compare the effects of market volatilities on NYSE Composite and Signet Jewelers and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NYSE Composite with a short position of Signet Jewelers. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Signet Jewelers.
Diversification Opportunities for NYSE Composite and Signet Jewelers
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Signet is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Signet Jewelers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signet Jewelers and NYSE Composite is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NYSE Composite are associated (or correlated) with Signet Jewelers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signet Jewelers has no effect on the direction of NYSE Composite i.e., NYSE Composite and Signet Jewelers go up and down completely randomly.
Pair Corralation between NYSE Composite and Signet Jewelers
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.82 times less return on investment than Signet Jewelers. But when comparing it to its historical volatility, NYSE Composite is 2.67 times less risky than Signet Jewelers. It trades about 0.13 of its potential returns per unit of risk. Signet Jewelers is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 9,333 in Signet Jewelers on August 24, 2024 and sell it today you would earn a total of 684.00 from holding Signet Jewelers or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Signet Jewelers
Performance |
| Timeline |
NYSE Composite and Signet Jewelers Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Signet Jewelers
Pair trading matchups for Signet Jewelers
Pair Trading with NYSE Composite and Signet Jewelers
The main advantage of trading using opposite NYSE Composite and Signet Jewelers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Signet Jewelers can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Signet Jewelers will offset losses from the drop in Signet Jewelers' long position.| NYSE Composite vs. Akanda Corp | NYSE Composite vs. Valneva SE ADR | NYSE Composite vs. Radcom | NYSE Composite vs. Western Digital |
| Signet Jewelers vs. Tapestry | Signet Jewelers vs. Movado Group | Signet Jewelers vs. Lanvin Group Holdings | Signet Jewelers vs. TheRealReal |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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